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Plan 4 is the student loan repayment plan for Scottish graduates who studied with SAAS funding. The repayment threshold is £33,795 for 2026/27 — the highest of any UK undergraduate plan. You repay 9% of income above this threshold. Loans are written off after 30 years. Most Plan 4 borrowers should not voluntarily overpay.
Scottish students who are funded by the Student Awards Agency Scotland (SAAS) repay their loans under Plan 4 — distinct from Plan 1 (older English/Welsh loans), Plan 2 (post-2012 English/Welsh loans), and Plan 5 (newest English plan).
The repayment threshold. For 2026/27, the Plan 4 threshold is £33,795/year. You repay 9% of income above this level. On an income of £40,000, you repay 9% × (£40,000 − £33,795) = 9% × £6,205 = £558/year (£46.50/month). Below £33,795, no repayments are due regardless of loan balance.
The highest threshold in the UK. Plan 4's £33,795 threshold is significantly higher than Plan 2 (English post-2012 loans: £29,385) and Plan 5 (£25,000). This means Scottish graduates repay at lower incomes than English counterparts. An English Plan 2 graduate earning £33,000 pays 9% × £3,615 = £325/year; a Scottish Plan 4 graduate pays £0.
Write-off after 30 years. Plan 4 loans are written off 30 years after the April following graduation. For a graduate finishing in June 2026, the loan is written off in April 2057, regardless of the outstanding balance. Many graduates will not repay their loan in full before write-off — and this is by design.
Why not to voluntarily overpay. Because of the 30-year write-off, any extra voluntary payments reduce the amount written off — meaning the government captures more, not you. If you'll graduate with a large balance and relatively modest earnings growth, your expected repayments over 30 years may total less than your outstanding loan. Voluntary overpayments in this scenario are effectively a gift to HMRC. This calculus changes if you expect very high lifetime earnings.
Interest rate. Plan 4 loans carry interest at the RPI rate (or base rate + 1%, whichever is lower). For 2026/27, rates are set using the March 2026 RPI figure.
Multiple plans. If a Scottish graduate later takes a postgraduate loan, it is treated as Plan 3 (postgraduate loan) separately. Plan 4 and Plan 3 repayments are collected concurrently, each at 9% of income above their respective thresholds.
For employees, repayments are deducted through payroll by your employer, alongside income tax and NI, via PAYE. HMRC instructs your employer based on your Plan 4 status. For the self-employed, repayments are calculated and paid via Self Assessment. Repayments only start in April after you graduate (or leave your course), regardless of when in the tax year you finish.
No — UK student loans (including Plan 4) do not appear on credit reference agency files and have no direct impact on your credit score. They do, however, reduce your take-home pay, which affects mortgage affordability assessments. Lenders ask about student loan repayments when assessing how much you can borrow for a mortgage.
Plan 4 repayments are still due on income earned abroad. You report your income to the Student Loans Company annually and repay based on your foreign income, converted at current exchange rates. The threshold is adjusted based on the country you move to. Not repaying while abroad is a breach of your loan agreement and can be pursued as a debt.